INNOVATION MANAGEMENT PROCESS and drove advertisement revenue away from print ... Flipkart and the...

INNOVATION

MANAGEMENT PROCESS IMPLEMENT AND SUSTAIN INNOVATION IN

YOUR ORGANIZATION

AUTHOR: SHASHANK SHWET

SVP - UX AND INNOVATION FORTUNE COOKIE

©Fortune Cookie. 2016

Innovation is needed but nobody knows how?

Objective: What is innovation and why do we need it?

Innovation is the new buzzword in use amongst the upper echelons of an organization. Senior

members of organizations are starting to appreciate the value of instituting innovation as a

process within the organization. Innovation management helps organizations, identify problems,

find relevant solutions and implement these solutions for business growth and sustainability. It

is the process to solve problems by generating a stream of ideas across the organization and

increase efficiency or enhance customer experience. Sounds great on paper right?

However, innovation initiatives usually lose steam due to a lack of clear objectives and goal

oriented, ROI driven planning of innovation programs. Also these programs fail to institute

innovation as a culture where employees are motivated to innovate on a daily basis. It does not

manage to get them involved.

The first step towards effective innovation management is to understand the basic need of

innovation. A company needs to evolve to keep competition and replacement products at bay.

New products need constant innovation so that they can tide over the wave of competition.

Then there are systems and processes that can be made more efficient with the innovative use

of technology. Hence innovation management results in better products, more efficient

processes or improved systems. This is in turn either increases revenue or decreases cost.

For example we can see innovation in a lot of products, services and systems around us.

LinkedIn users invest in Linkedin to reach out to a large number of people of a particular work

type or profession either to hire or to work with them. Google innovated on the hyperlocal

search and drove advertisement revenue away from print and television media channels.

Amazon, Jabong, Flipkart and the likes brought better convenience to users and still keep

innovating to deliver products more efficiently. Cash on delivery is an innovative solution to

entice the Indian user and lower the barriers of shopping online.


Lean business is something most businesses want to achieve. This requires for organizations to

look inwards at systems & processes as well as outwards to actual customers and users to

enhance efficiency and improve customer experience. Innovation management allows business

leaders to achieve both these perspectives and plan sustainable innovation.

Innovation Management can be achieved in two major ways – organic innovation and inorganic

innovation. Organic innovation is when the company internally gears up to generate innovative

ideas. This can be achieved with each employee taking up a personal responsibility towards

innovation and the company as a whole trying to design better products, systems and

processes. This needs senior management’s buy-in for the idea and needs clear communication,

rewards and recognition to encourage this organic change in each employee. Innovation then

becomes a culture in the company and the company achieves innovation goals.

Large organizations also run programs to attract startups in their interested industry sectors. The

interaction with startups enables two things for companies – 1) It enables them to better

understand new ideas in design, technology and business models that they can adopt 2) it gives

the companies an easy target to acquire design, technology and businesses to strengthen their

processes and offerings. This method of acquiring innovation from outside the company is

called inorganic innovation.


The Pillars of Innovation

Objective: To understand what foundation and pillars a company needs to build, to successfully

adapt to innovation management.

Innovation is a major organizational decision. Over the years of working with various companies

for innovation management, I have seen companies fail in implementing Innovation

management due to five main reasons. These are the foundation and the four pillars of

innovation management. The diagram below shows as to how innovation management is

supported by these four pillars.

The foundation: Tools Processes and Frameworks

Innovation management like any other project needs to be driven and process oriented inside

an organization. Hence this activity requires an internal champion – one person who is

responsible to drive innovation and take decisions. A clear hierarchy helps in quick decision

making and budgetary allocation. In addition the innovation management process requires

defined toolkits and process flows to guide individuals to generate ideas, file ideas, collaborate

on these ideas and work on a prototype. A defined process needs to prompt stakeholders to

think of problems, employees to provide ideas and solutions to these problems and the

company can collect, evaluate and prototype these solutions. It gets highly complicated in large

organizations and hence the right tools and processes are required as a foundation for

innovation management.

The Pillars of innovation management

1) Business Goals: Innovation management should always support business goals of the

organization or else you will end up with prototypes that have no business value for your

product or the customer. Hence, always align business goals with innovation goals.

Invest in areas and sectors in which the company wants to grow and ensure that the

entire organization is working towards a fixed set of problems. Microsoft is one of the

biggest case studies here – the Steve Ballmer – Steven Sinofsky episode. Microsoft ended


up with two versions of Windows that needed high cost and post-sales support to

maintain. It took them another year to get this blunder sorted out. 2) Customer listening Posts: Organizations need to do everything they can to listen to

their customers. This requires for an organization to provide different listening posts.

Customer listening posts are those points that help the management capture what the

customers talk about you as a company or product. And each customer feedback helps.

Standard customer listening posts need to be enhanced with the advent of digital

products. Customer service call centers need to be enforced with chat based apps, self-

service apps and online reputation management. Customer listening posts become an

important factor to understand the pain points, likes and dislikes of the user and

accordingly steer your innovation program to solve those problems that will enhance

customer experience. 3) Metric Analysis – Each organization needs to create, measure, track and react to

metrics of all kinds. A metric can be any piece of information that defines the business of

the company. User growth, revenue, cost are standard metrics of the health of the

business. A detailed study of the different matrices needs to be done to provide the

three big hindrances to better growth of the company. These hindrances turn into

problems for the innovation team to solve. 4) Management Buy In – Getting involved in innovation management requires a dedicated

team and budgetary allowance for prototyping and testing. It requires the company to

closely look at metrics of each system and process. It requires setting up customer

listening posts. All of this cannot be done without a management buy-in.

With implementation of this foundation and the four pillars of innovation in companies with

internal policies, rewards and recognition and support for tools and frameworks – there happens

a change in the culture of the company towards innovation. Each employee gets more involved

in problem solving and constantly thinks of solutions to make his process and the company as a

whole better.


How mature are we in the innovation process

Objective: To understand where a company stands on the innovation management scale

The Innovation Management scale helps organizations qualitatively evaluate where they stand in

implementing innovations within the organization. The scale is a factor of two matrices – the

number of ideas being generated in the organization and how large a group of people are

involved in the generation of ideas and solutions to listed problems.

The scale divides companies into four stages of implementing the innovation management

process - Novice, Intermediate, Apprentice and Expert. Each has been explained below: -

Novice: A novice company is one where only the founders or senior management think about

innovating to enhance customer experience or reduce cost. Although most founders and Sr.

management have a finger on customer problems they probably do not have enough time to

find a relevant solution – or at least to dedicatedly invest in the innovation process and find

solutions. Also in many large organizations there may be a disconnect between the

management and the ground realities of problems faced by customers. Such organizations

where problem solving is the responsibility of an elite few is in the novice stage of innovation

management.

Intermediate: Only those organizations that have experienced the benefits of innovation see

the value in institutionalizing the innovation process. Think of CavinKare creating shampoo

sachets to increase their sales or Apple releasing the iPhone to increase the company’s product


portfolio. All these products where a result of Design Thinking and innovation management. A

company that invests in an R&D team to exclusively manage innovation and get this competitive

advantage in their value proposition to customers is in the intermediate stage.

Apprentice: Companies that inspire business line managers and executives to practice

innovation constantly, to find solutions to problems faced by customers or inefficiencies of

processes and systems are in the Apprentice stage. All 4 pillars and a foundation are necessary

for a company to adopt innovation management.

Expert: When the company can extend innovation tools and frameworks to every employee and

inspire them to generate ideas to problems the company is an expert in innovation

management.


The Fortune Cookie innovation process The innovation process is divided into three main phases: -

Problem Identification: This is the phase where a list of problems is identified through various

approaches. It includes listening to the customers, analyzing existing metrics and Stakeholder

interviews.

Ideas and Solutions: The problem list is published, a tool kit distributed and every employee is

encouraged to find solutions. Approaches like hackathons are followed to create an event for

innovation.

Implementation: The prototype of the top 5 problems are created and analyzed for market

readiness. In addition the product or the feature is integrated with the present digital strategy

and launched in the market.

The diagram below shows the three phases of innovation. A list of problem is generated in the

problem identification stage. These problems are shown in the diagram below with red balls.

This list is then circulated amongst innovators who are encouraged to find solutions to them. A

list of solutions is achieved in the solution finding stage. Each solution is vetted and the top

ones are chosen for prototyping. The selected ideas for prototyping are shown with blue balls.

Establishing Goals of innovation

It is important for the team and the stakeholders to establish the right goals for innovation. A

management level discussion is required to decide upon the money to be spent on innovation

and the ROI of the invested sum. Without these parameters in place innovation will always seem


like chance rather than dedicated effort. A goal setting exercise needs to be done that will

define the industry segment, product portfolio, systems or processes in which the company

desires to go forward with innovation. The outcome, the blue balls in the above diagram need to

be defined clearly. Some of the features of outcomes are when and where innovation is needed.

Listed below are few questions which make a fair starting point:-

Which Business line needs innovation to grow?

Which geography needs innovation to grow?

Which industry segment does the company thinks it will grow in?

What are the users or customers saying about your business?

Some very costly systems and processes that need redefinition

Product improvements

This is not an exhaustive list. This list should be in fact the problems that the CEO or a business

manager notes down in his everyday routine. Fortune Cookie provides a toolkit to zero down on

the right problem list so that stakeholders can drive innovation in the wanted direction.

What is the objective of the innovation management process?

There are four main objectives of the Fortune Cookie innovation management process: -

1. Drive innovation towards a particular goal – business line, product, system or process,

in line with the strategy of the company

2. Drastically increase the number of innovators in the company and take the company

from Novice to Expert level in the Innovation Management scale shown above

3. With large innovators, come a large number of ideas. Hence a system and process to

manage the four pillars of innovation management shown in the section above.

4. Design solution prototypes and gather user testing and marketing testing results –

These prototypes will always be aligned with the goals established in point1 above.

The Process

As discussed above there are three phases to the process – Problem identification, Ideas and

Solutions, Implementation. Each phase is divided into two major steps as shown in the diagram

below. There are different approaches used to derive the right problem, idea to solution and

prototype. Each of these approaches is shown within the diagram. It’s only the second phase

that needs to be followed sequentially that has been shown in the diagram. For the others you

can implement the approaches in any order, as logistics permit. Fortune Cookie provides a

toolkit for each of these approaches.


The six steps to guide through the objective of the process are shown in the red chevron in the

process diagram. These are: -

Steps Expected Output

Finalize goals Exact list of problems in the organization that

is affecting its revenue potential, costly

products, systems and process

Strategize Problems that need immediate attention

Capture Ideas A list of ideas from every innovator in the

company. A large organization needs tools

and frameworks to implement capturing

ideas

Evaluate short list Ideas A process to shortlist the right idea and

solution that fits in the company strategically

Prototypes Create prototypes with user testing reports

Implement Implement these prototypes in the company’s

product, systems or processes

Each step gives an output to the stakeholders and keeps in check that the innovation

management process is in line with the strategic thought process of the company.


Process summary


Implementation and sustenance of the innovation management plan As discussed above one of the main objectives of implementing the innovation management

plan is to gather more number of innovators and more ideas and hence more solutions. This

results in a company prototyping a large number of products and all’s well that ends well. Right?

One of the most difficult parts of the innovation management plan is to implement it. Further it

is harder when it comes to sustaining it. In this section we are going to discuss this problem –

the implementation and sustenance of the innovation management plan.

Points to ponder for implementation

We have discussed earlier in the paper that we need management buy in. All the other pillars

and foundation also needs to be present for implementation. The other points to ponder are

culture Management and Digital by DNA.

If we need to drastically increase the number of innovators in an organization then innovation

needs to be ingrained into the culture of the organization. The HR department plays an

important role implementing innovation as a culture. One of the most direct ways of

implementing innovation thought process in an organization is constantly conducting Design

Thinking workshops. However, forced adult learning is not the best way to bring about culture

changes and often fails. An organization needs to create a system that incentivizes employees to

innovate using the right approach. One method is to generate a list of problems that is

periodically published and then have events such as hackathons to promote shared problem

solving and innovation amongst employees.

However, just publishing problems is not enough. Employees need to be taught how to

implement the innovation process and funnel ideas to achieve constructive solutions. Design

toolkits or online platforms to map ideas are the approach that should be followed. These

toolkits and frameworks should become the foundation of the innovation management process.

Launching an innovation management exercise gives an opportunity to senior management and

business stakeholders to ponder on systems and processes that need to be upgraded or

changed. In the last decade a large number of businesses have adopted to digitalization of

systems and processes to make them more efficient and cost effective a digital by DNA study

allows you to evaluate processes and find the right solution for digitalization. The right

problems are chosen and a process study is conducted. The pain points found in the process

chain are called out and added to the list of problems. A special study is done based on the

digital capacity of the process – basically asking question if the process in its current form has

the capability to be digitalized.

Points to Ponder on sustenance

Sustenance of innovation is based on the foundation and the four pillars. The stronger we are on

the pillars the stronger the innovation process would be.

INNOVATION MANAGEMENT PROCESS and drove advertisement revenue away from print ... Flipkart and the...

Documents

Transcript of INNOVATION MANAGEMENT PROCESS and drove advertisement revenue away from print ... Flipkart and the...